State Auditor of Public Accounts Recants Prior Financial Distress Notification

Richmond, VA — The Commonwealth’s Auditor of Public Accounts (APA) notified city officials in a letter dated last Friday, January 26 (attached), that Richmond “does not appear to be in a situation of fiscal distress that would warrant further assistance or intervention from the Commonwealth,” as the APA’s preliminary determination indicated in August of last year.

Richmond’s Director of Finance, John Wack, provided members of city council with the attached intracity memorandum, explaining how the APA’s Financial Assessment Model (FAM) prematurely identified potential financial distress indicators last August.

The city’s financial advisors, Davenport & Company, also determined the FAM criteria previously used were too limited in scope and substance, did not take into account Richmond’s demographics, economic development, strength of management nor the city’s debt practices and reasons for debt.

The APA has now set the record straight.

“I am pleased the APA has obtained a further and better understanding of our financial strengths and best practices,” said Lenora Reid, Richmond’s Deputy Chief Administrative Officer for Finance and Administration. “Richmond remains actively and successfully engaged in bolstering our city finances, and this most recent APA correspondence reiterates this fact for all to see.”